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tv   First Business  FOX  October 30, 2012 4:00am-4:30am PDT

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likely to play out. in today's cover story... how traders from the storm zone to chicago are handling sandy. a storm of a different sort is happening in greece.. the latest on how greek residents are battling back against a tough new round of spending cuts. plus, mega millions-- how pac money is changing the tone of this year's election. first business starts now. you're watching first business: financial news, analysis, and today's investment ideas
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good morning. it's tuesday, october 30th. i'm angela miles. hurricane sandy takes down the market. broll: wall street sign, empty streets around cboe for the second day in a row-- major trading exchanges including the nyse and cboe remain closed. it's the first time that's happened since 1888 when a blizzard blew through new york. the storm is bringing one benefit. in north carolina a ski resort is opening earlier than ever as sandy drops off several inches of fresh snow in the mountains and a shake up at apple. the senior vp of iphone and the head of retail are both leaving the company. with that we turn to larry shover of sfg alternatives-- it's the second day in a row that the major exchanges will be closed today. what do you think will be moving the most? oil, gold, or sit-on-the- sidelines kind of a day? probably a little on the sidelines but probably oil and the whole energy complex because
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they did shut down refineries and we just don't know. right now the refinery capacity was already low to begin with so just expect a little bit of volatility going forward with oil and also gasoline. with the new york stock exchange closed, all eyes were on other markets including europe which didn't really fall apart yesterday. what do you think about that? starting in china---china was down a little bit but their numbers were good. i think there was just a drag on their earnings or at least people were scared about that. with europe, europe was down yesterday and some was down quite a bunch but there is a silver lining with greece and financing needs and spain. so those two things combined are going into the greater picture and this hurricane has been a terrible thing for the united states but
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i think the stock market held up yesterday because of that. there are reports that the jobs number was due out on friday could be delayed beacue of sandy. what's your reaction to that and what are traders saying about that? i think most traders are expecting it to be delayed but we can't compare sandy to anything else. it's so much bigger than any of the other hurricanes that hit the mid-atlantic states in a very long time. so, with that in mind, the fact that the exchange hasn't closed down two days in a row since 1888 due to weather. the pls report coming out a day or two later---its not really a factor right now. good to have you on the show. that's larry shover of sfg alternatives at the cme group which does have trading going on. thanks larry. hurricane sandy--a stitched- together combination of worst- case scenarios is raking the east coast. in our cover story how sandy is shutting down everything including parts of the economy. but will the effects be lasting ones? sandy's frightful combination of late-season hurricane colliding with an artic storm led to mass evacuations in the northeast. "if you are in an evacuation zone and haven't left, get out now before you can't." atlantic city casinos-- silent. rockaway, new york--braced with bulldozed walls of sand. an expected storm surge during a full-moon, when tides are at their highest already could reach 11-feet. in midtown manhattan, high winds broke a construction crane atop a high- rise. "...of the 76 evacuation shelters located in public schools around the city, there are already more than 90-people here." at airports from washington to boston--a region of 50-million people, airlines canceled more than 13,700
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flights through wednesday-- although some operations may resume tuesday afternoon. but for the first time since 18-88, the new york stock exchange will have been closed for two consecutive days due to weather, monday and tuesday. it intends to reopen wednesday, along with nasdaq. bond trading, which closed early monday will be closed tuesday. in chicago, the chicago board options exchange and parts of cme group were closed. "the markets are in disarray. there isn't a lot of participation on days like this." among those sidelined traders-- luke rahbari who hunkered down with his family in connecticut. "a lot of the stores were sold out of batteries, generators, chain saws. flashlights were definitely gone." public transit and schools in new york and other cities are shut down. while utility crews not in harm's way headed to communities in sandy's path. "we have commitments of about 4,000
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utility workers to come to this state at this time." damage from the storm is estimated to be between 10-to-20-billion dollars. more than irene's 15.8 billion, last year. but far below katrina's 108-billion dollars and 18-hundred deaths and missing in 2005. unless there is damage to infrastructure, economists say ports and rail yards will make up for lost business quickly. some stock trades, perhaps not--because a light week was expected pending the outcome of the presidential race, a week from now. among insurers, allstate, travelers and chubb corp have the largest market share in sandy's path. corelogic, estimates it includes 284,000 homes worth $88-billion dollars. economists are mixed on whether the storm's impact will affect fourth- quarter g-d-p. mark vitner, senior economist with wells fargo securities says it depends how much is shut down and for how long. mark zandi at moody's analytics says the storm may
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cause spikes in economic activity--repairing and rebuilding. depsite the storm-- the government is expected to report unemployment numbers for october this friday. phone companies along the east coast are preparing for the likelihood of overtaxed communication infrastructure during hurricane sandy. at&t is fueling up emergency portable generators and disaster recovery trailers to move into affected areas. authorities recommend people use text messaging rather than phoning or internet during large scale disasters. texting uses far less network capacity. several corporations are postponing earnings reports in the wake of hurrican sandy. among some notable companies that were supposed to report today pfizer, sirius xm radio, power plant company nrg, martha stewart living and avon are all waiting until later this week or even next week to report numbers. a number of potentially market moving events are cancelled in new york. new york federal reserve president william dudley has called off his speech today in
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connecticut. his remarks tend to be closely monitored because he's reportedly viewed as a close confidante of fed chair ben bernanke. facebook dropped plans for an engineering open house tuesday in new york... plus an event thursday at fao schwartz for facebook gifts- a feature allowing users to send gifts to friends. google cancelled its flashy android event in the big apple. but still revealed its nexus 10 tablet and nexus 4 smartphone on its website. the 7 inch tablet sells as low as $199 dollars. u-b-s, struggling since the start of the financial crisis some four years, is reportedly set to cut as many as 10,000 employees and up to 15 lines of business in an effort to right itself. the move by the swiss bank is one of the more dramatic seen from chief executive sergio ermotti and will likely come from u-b-s's investment bank which has more than 16,000 employees. the official announcement is expected later today when the bank reports its
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third quarter results. merger is shaking up the publishing industry. penguin and random house are hooking up as the pairs corporate parent companies pearson of britain and bertelsmann of germany join businesses. critics are concerned it could lead to higher book prices. while other say the combination will create a force against internet retailers such as amazon. honda cuts its full year profit forecast as it faces a backlash in china. after disputes between japan and china over ownership of islands in the east china sea, the chinese are shunning japanese goods. as a result honda now expects about a 20% percent drop in car sales in china. because these clashes couldn't be anticipated they were not a part of honda's original profit outlook. despite uncertainty in the china market honda says it will continue its current investment plan there. toyota tops the latest consumer reports survey. the japanese car company was the overall winner in this year's reliability rankings-- taking 7 of the top 10 spots.
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among u.s. car makers ford especially took a hit ending up at the bottom of the reliability list after making into the top ten 2 years ago. ford fell on consumer complaints about its infotainment and control system. meanwhile.. toyota is said to be on track to sell a record number of vehicles around the world this year. bmw's top luxury car is being recalled... again. more than 45,000 7- series sedans, model years 2005-2008 need repairs to correct a flaw that could cause them to roll away while in park. bmw says its a software problem on cars with keyless ignition. dealers wont be able to make the fix until march. last week, bmw recalled many of the same vehicles because some doors were not latching because of the software.
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its royal luster thanks to an 83 percent dive in earnings in the third quarter. this is the company's first full quarter as a publicly traded company and charges relating to that transition as well as struggles to attract new customers were additional challenges for the burger giant. the company did report a profit of $6.6 million, but that's down from $38.8 million a year ago. revenue is down 26% to $451.1 million.
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investing overseas.. a new study ranks the best and the worst places to park money off shore. plus a check up on how greek residents are dealing with the latest round of wage and pension cuts.
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every year professional services firm b-d-o surveys more than 1,000 chief financial
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officers who are currently planning foreign investments. this year's survey was broll: greece, middle east just released and southern europe is now seen as being an equally risky investment as the ever-turbulent middle east. the survey does say that c-f-os are still interested in foreign investment but they are more cautious than in years past. top investment choices are china, the u.s. and brazil and at the bottom of the list iran and iraq join greece. eurozone leaders are scheduled to meet 3 times in the next couple of weeks to talk about the debt crisis in greece. jack ewing of international herald tribune joins us via skype this morning with an update. good morning jack. greek leaders have for the most part agreed to another bailout for greece which also comes with another round of austerity measures. what's the latest on public reaction? of course, the greek people aren't very happy about it. the latest i hear from my colleague in athens is that the minority party in the government---the left wing party---is trying to hold up the package because they think its
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too tough. i'm sure that that's finding some sympathy among the public. so we still don't have a deal yet. they're moving slowly towards one it seems. what exactly will this mean for the average citizen in greece? these austerity measures? life in greece is already very, very tough. i was just in athens a couple of weeks ago and the standard of living has really dropped very noticeably for most people. so, in a way, things can't get much worse. what's positive is that they will have some kind of deal and they'll get some more international aid. there's also talk that there will be some more debt relief which would be very positive for the greek people. what really needs to happen now is for the economy to start to come back but there's not really much sign of that. as you know, the bailout money is going to be used to shore up the banks in greece. is that playing a role in public outrage since the banks are partly to blame for what happened? the banks in greece actually behaved pretty well. so they're not to blame the way that banks were to
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blame for crises in other countries. i think people are more angry at germany and the other european partners who they feel are being too stingy and demanding too much sacrifice. this is abstract for the man on the street but it would be positive if the greek banks have some money that they can lend out to help get the economy going again. who is mostly to blame for the crisis in greece? that's a tough one. i think it's really a government problem going back years. the way that politics in greece works--the way you got votes is you gave jobs to your political allies and they have a clause in the constitution that you can't fire anybody so each time a new government came in they hired more people without getting rid of existing people. the government just kept getting bigger and bigger and more expensive and eventually the whole thing collapsed. thank you so much for that update. that's jack ewing of international herald tribune. still ahead what you probably haven't heard yet about pac money being used to promote candidates in this year's election.. that's next. with election day just one week away, political campaigns across the country are on a spending spree to reach voters. the advent of super-pac's is making a tremendous difference in this year's elections. paul eggers gives
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us the full picture on these mega campaign contributors. with the white house and 468 congressional seats up for grabs on election day, political campaigns across the country are now spending big bucks to reach voters any way they can "maybe you have a get out the vote call, or maybe you have tv placements or maybe just traditional direct mail
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marketing, those budgets are all dependent on the nature of the race itself." the presidential campaigns themselves have budgets in the hundreds of millions of dollars. add in the deep pockets of each candidates super pac, and well over 1-billion dollars will be spent on the white house race this year. congressional races certainly won't see that amount of spending, but that type of spending - coming from both the candidates campaigns and from outside groups - does exist. 'we ask people to donate money to our superpac and in our case, we're spending money on 6 congressional elections here in illinois.' ron gidwitz heads conservative
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super pac the new prosperity foundation. through the middle of october, federal election commission filings revelaed the organization had spread more than 1.3 millons dollars across 6 house races, spending limited by one important restriction. "we cannot coordinate our campaign activity with a candidate's campaign activity." still, like any interested observer, super pac's do closely watch campaign spending decisions in the races where they're putting money to work. "frankly, what we are doing is we're watching from a distance what the candidates from both sides are doing and we're trying to fill in where the candidates themselves are not doing something." going negative is a touch choice for a candidate, according to lorena mess-a of political consulting firm grainger terry. 'the negative component is much more scary for a candidate
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because it will leave a permanent taste in a voters mouth.' meaning that a super pac can step in to fill that void" 'people don't generally like negative ads, but the reality is negative ads do work.' and the preceived success of negative advertising has super pac's like new prosperity unafraid to invest in the tactic. 'we're not making up any stories, we're just looking at the candidate's record and we'ere sharing what that record is. people tend to get dissatisfied with candidates who run negative ads, but if we run the negative ads, then let them get mad at us. we're not running for election.' that was paul eggers reporting. ron gidwitz of the new prosperity foundation says he expects his super pac to empty its budget by election day. then on november 7-th, the organization will immediately begin strategizing for the 20-14 mid-terms. up next-- how hurricane sandy is having an efect on facebook stock.. even though the market is closed.
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it's an intense day once again for traders who have friends and family on the east coast. good morning to matt shapiro, he's president of mws capital and what are you hearing from some of your peers or family? everyone took it very seriously and got out of the way and got into safe ground. the local officials were ordering mandatory evacuations. my sister moved to a safer part of the state actually. as far as the market---when it does or if it does reopen on wednesday--- what do you anticipate? will it be a huge move either up or down or just kind of a flat day? what do you anticipate? i think it's going to move. experience tells you---remember 9/11 the markets opened and lots of stocks related to tourism and travel dropped substantially. the market dropped substantially. we'll have to see what the damage assessments are. this
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was not what the market was looking for for the holiday and certainly not for the end of the month. hopefully it's not as bad as the worst fears. a lot has happened over the past couple of days but of course there are a lot of stock stories including the facebook story with about 230 million shares that are held by employees are now eligible to be sold on the open market. but there is no market. what's likely to happen with facebook stock? isn't it crazy? just another snafu in the facebook thing. they had a great earnings report last week. stock was sold down initially below 19 and then popped all the way up over 23 at some points. so now all these employees---10 percent of the stock's gonna come to the market. i assume they're gonna sell a fair amount of that but people out there---it might be a good opportunity to get into facebook. i've been actually pretty positive on it. they did make their numbers and it was a very positive thing that happened for the stock. their earnings report last week--- first time they've had some really good news for this offering. what's the best level for people to but facebook if they do want to get into it? i think right around here. if it goes below 20 i'd definitely be interested in the stock. internet stocks are not necessarily my favorite angie but i think facebook has shown they can earn some money. we'll have to wait and see what happens with that one. best to your family matt and of course to your trading peers over there in new york. thank you for your time today matt shapiro of mws capital. that's does it for today. coming up tomorrow -- with consumers set to spend $2.4
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billion dollars on candy alone for halloween -- we'll have a sweet look at trading sugar. from all of us at first business ... have a great tuesday and to our viewers along the east coast are . airport officials say the impact could lessen later today. now on san francisco giants, the big welcome they
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received, the big preparations are underway for tomorrow's big parade. thank you for joining us, i am pam cook, chilly weather. we have some fog and yesterday it was thicker in spots and we have a system with highs some 70s and 60s, here is sal. traffic is doing pretty well around the bay area, we don't have a lot going on and i want to show you some pictures. there are a few things we can


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